A Case Study of Jextra Neighbourhood Stores in Malaysia
Case Question:
Q 1: How should Tom Chong resolve the request from mayor of Klang?
Q 2: What should Chong do about the rumors of bribery and kickbacks to the category
manager?
Q 3: Does the Jextra Business Conduct Code help Chong in resolving the issues?
Q 4: Are these kinds of issues that Chong should have anticipated as country manager?
Case Summary
Tom Chong is the country manager in Malaysia for Jextra Stores (Jextra), a multinational
retailer with supermarkets throughout Asia. The company is headquartered in Hong Kong.
Jextra operates ten Neighborhood Market supermarkets in Malaysia. Chong has two
subjects he must solve. One involves a recent conversation with the mayor of a town in
which Jextra would like to build a new store. The mayor suggested that Jextra’s application
for rezoning would be more likely to be approved if Jextra contributed to constructing a
new primary school. The mayor also wants Jextra to help pay for a flyover at the road
intersection for the proposed site. Chong’s other issue involves one of his category
managers. The manager may be accepting money and gifts from suppliers. Although
Chong has no proof that the manager is acting inappropriately, there are many rumors
floating around Jextra’s office.
Q 1: How should Tom Chong resolve the request from mayor of Klang?
According to Jextra’s Business Conduct Code, “it is illegal to pay or receive a bribe
intended to influence business conduct,” so Chong should have no qualms about denying
the donations if they are a precondition of doing business in Malaysia. Furthermore, the
code instructs employees not to partake in “any activity that creates the appearance of
anything improper,” which could certainly transpire if Jextra funded the mayor’s sister’s
public project.
Accepting the offer is tempting to Chong because the number of new stores is a
performance metric against which he will be evaluated, and Jextra’s entrance into Klang
could easily be thwarted by a competitor who would appease the mayor. Nevertheless, in
taking the vague terms, Chong would be violating the conduct code and tarnishing Jextra’s
reputation as an ethical, law-abiding firm. He might also be entering Jextra into a toxic
relationship with high future costs to the company’s shareholders.
In a bigger context, Chong would be undermining the Malaysian government’s recent
reformation, in which political leaders and government authorities promised to gain project
funding and business transactions transparent to citizens and investors alike. Disregarding
